Friday, February 16, 2007

Probate Assets vs. Non Probate Assets

Post death transfers of assets in California roughly fall into two categories: probate transfers, and so-called "non probate" transfers. An example of an asset which would probably require some sort of probate administration (i.e., constituting a probate asset) would be a piece of real property, for example, having a form of title such as "John Doe, a single man."

An example of a probable non probate asset (which would likely not require the intervention of a probate court) might be: "John Doe, a single man and Jane Roe, a single woman, in joint tenancy with right of survivorship." If Jane Roe were to die, for example, the property would immediately transfer to John (at the moment of her death) by operation of law.

To decide whether property is a probate or non-probate asset, ask yourself: Does the property have anywhere to go? In other words, without an order would the property automatically transfer to someone else? If the answer is "yes" (because some form of transfer already took place) then it is probably not a probate asset. On the other hand, if the property has "nowhere to go" otherwise, then it probably is a probate asset requiring administration.

This is a very general rule, however; there are exceptions. In California, for example, administration would not be required in the case of a small estate, even though the asset might be considered a probate asset. Also, a spousal property petition [Probate Code § 13502.5] is a form of a probate proceeding. But the proceeding is sharply abbreviated, and is essentially an order that probate administration is not required.

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I am a California attorney, with a Southern California office located in the San Gabriel Valley. I also write extensively on estate and financial planning topics. For a more complete profile, visit my law office website. My profile is here. The main page for the Law Offices of Larry D. Stratton is here.